Description of the event
In March 2024, Ping An of China and its member companies in the technology sector, Lujin Institute, Financial One Account, Ping An Good Doctor, and Auto Home released their 2023 annual reports.
Incident comments
The finance+technology strategy continues, and new content such as technology leading high-quality development has been proposed. Ping An of China began deploying fintech in 2012, exploring the deep integration of modern technology and traditional finance, and striving to create the core driving force for Ping An's future growth. Since then, Finance+Technology has been the company's development strategy. In 2023, the company continued its technology strategy, adding content such as leading high-quality business development and accelerating ecosystem construction. The aim is to build leading technological capabilities, be widely used in the main financial industry, accelerate ecosystem construction, dig deeper into internal business scenarios, export leading innovative products and services to the outside world, and promote the improvement of the industry ecosystem and technological level.
The share of technology investment has rebounded, and the overall number of science and technology employees has been optimized. 1) The company optimized the size of science and technology employees. At the end of 2023, the number of employees at Ping An Technology was 55,000, accounting for 19.2% of total employees, accounting for 19.2% of total employees, -8.0 pct; 2) Investment in the technology division increased. In 2023, the company's technology division expenditure reached 17.3 billion yuan, -5.0% year-on-year, accounting for 1.9% of total revenue, +0.3 pct; 3) Technology research and development focused on core technology and independent intellectual property rights, leading the world in the number of fintech and healthcare patents. By the end of 2023, Ping An Group's total number of patent applications reached 51,500, +11.8% over the same period last year. The Group ranked first in the world in the number of patent applications in the field of fintech and healthcare.
The main financial industry continues to embrace digital transformation and promote the efficiency and cost reduction of traditional businesses. 1) In 2023, the company's intelligent automatic renewal of 30.3 billion yuan, +13% year over year, AI seat service volume was about 2.22 billion times, -14.6%, intelligent claim interception and loss of 10.82 billion yuan, up +16.0% year on year; 2) In terms of securities business, the number of individual customers exceeded 23 million, ranking first in the industry, with brokerage stock trading volume (excluding seat leasing) market share of 3.62%, -0.10pct year on year; 3) In terms of production and insurance business, the 2023 app registration platform was used as the core service platform. The number of users exceeded 200 million, +14.9% year-on-year, and the cumulative number of ride-hauled vehicles exceeded 136 million, +36.0% year-on-year. The monthly activity in December reached 40.49 million people, +9.4% year-on-year.
The customer structure continues to improve, and the progress of cross-selling and customer conversion has slowed slightly. 1) At the end of 2023, Ping An had 230 million individual customers, +2.2% year over year. On a hierarchical basis, the number of affluent customers accounted for +4.1pct to 43.8% year over year, and the customer structure continued to improve; 2) The number of contracts per company customer in 2023 was 2.95, -0.7% year over year. The number of individual customers with multiple subsidiary contracts was 88.01 million, -2.4% year over year, accounting for 37.9% of total individual customers, or -1.9 pct year on year. On a hierarchical basis, the number of contracts per customer for high-net-worth clients was +2.5% to 21.2. Average operating profit per customer was 498 yuan/person, -14.1% year-on-year. The decline in average customer profit was mainly affected by short-term bank retail sales and retail loans for personal loans.
Member companies in the technology sector are still in the process of transformation, and there have been positive changes. The net assets of the Ping An Technology sector at the end of 2023 were 97.25 billion yuan, +2.4% year-on-year, and achieved net profit of 2.05 billion yuan in the same year, or -43.2% year-on-year.
Among them, Lujin Institute, Financial One Account, Ping An Good Doctor, and Auto Home achieved net profit of 8.9 billion yuan, -3.6, -3.2, and 2.16 billion yuan respectively. The total profit contribution was only 1.2%. Due to changes in the market and regulatory environment, the overall performance of the company's technology sector was under pressure. At a micro level, Financial One Account and Ping An Good Doctor promoted business structure transformation, improving profitability, and net losses narrowed significantly; Lu Jin Institute is firmly promoting the transformation of a 100% risk-taking business model and is still in a painful period of transformation; Auto Home is operating steadily, boosting the new retail business, improving its business structure, and significantly increasing its customer base.
Risk warning
1. Industry policies have been drastically adjusted; 2. The equity market fluctuates greatly and interest rates have declined sharply.